A Critique of the Austrian Approach to Holistic Concepts

"In this article I will revise Mises and Hayek's thesis about the proper categories of economics. In their view, classical economics was successful in identifying the right concepts of economic science, but its aggregative (universalistic) and objective approach was not satisfactory. Keeping the objectivist view of economic science, macroeconomics undertook a stronger form of aggregation, introducing a set of completely arbitrary categories, which I shall call holistic concepts. According to the Austrians, classical categories must be preserved, because they are compatible with methodological individualism and their objective content may be replaced by a subjectivist approach. Holistic concepts, instead, are considered incompatible both with methodological individualism and with subjectivism."